U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
(Mark One)
x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1996.
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE TRANSITION PERIOD FORM TO .
Commission file number: 0-6292
RAIN FOREST - MOOSE, LTD.
(Name of small business issuer in its charter)
Oklahoma 73-1491593
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
4031 B Delmon Lane
Springdale, Arkansas 72762-2179
(Address of principal executive offices) (Zip Code)
(501) 756-8299
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act during the past 12 months (or such
shorter period that the registrant was required to file such reports), and has
been subject to such filing requirements for the past 90 days. Yes No X
Applicable only to issuers involved in bankruptcy proceedings during the
preceding five years
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes___ No___
Applicable only to corporate issuers
The number of outstanding of Common Stock as of August 10, 1996, was 9,287,622.
1
<PAGE>
RAIN FOREST - MOOSE, LTD.
Index to Quarterly Report on Form 10-QSB
Part I - FINANCIAL INFORMATION Page
Item 1 Financial Statements..................................................3
Consolidated Balance Sheets As of June 30, 1996, and December 31, 1995.......3
Consolidated Statements of Income
For the Three and Six Months Months Ended June 30, 1996 and 1995............4
Consolidated Statements of Cash Flows
For the Six Months Ended June 30, 1996 and 1995.............................5
Notes to Consolidated Financial Statements...................................6
Item 2. Management's Discussion and Analysis or Plan of Operation............9
Part II - OTHER INFORMATION
Item 1. Legal Proceedings...................................................12
Item 2. Changes in Securities...............................................12
Item 3. Defaults Upon Senior Securities.....................................12
Item 4. Submission of Matters to a Vote of Security Holders.................12
Item 5. Other Information...................................................12
Item 6. Exhibits and Reports on Form 8-K....................................12
Signatures...................................................................13
Index to Exhibits............................................................18
2
<PAGE>
Part I - Financial Statements
Item 1. Financial Statements
RAIN FOREST-MOOSE, LTD
CONSOLIDATED BALANCE SHEET
As of June 30, 1996 and December 31, 1995
June 30, December 31,
Assets: 1996 1995
---------- ------------
Current Assets:
Cash and Cash Equivalents........................... $ 22,927 $ 3,008
Accounts Receivable................................. 65,000 50,227
Employee Receivables................................ 1,972 1,972
Prepaid Expenses.................................... 164 822
Inventory........................................... 193,507 154,898
---------- ------------
TOTAL CURRENT ASSETS................................ 283,570 210,927
PROPERTY, PLANT AND EQUIPMENT, net of accumulated
depreciation of $17,943 in 1996 and $11,158 in 1995. 51,792 57,525
Other Assets.........................................
Organization Costs, net of accumulated
amortization of $1,125 in 1996 and $675 in 1995..... 3,375 3,825
Note Receivable Stockholder.......................... 30,775 --
-------- --------
TOTAL OTHER ASSETS................................... 34,150 3,825
-------- --------
TOTAL ASSETS......................................... $369,512 $272,277
======== ========
Liabilities and Stockholders Equity
Current Liabilities:
Bank Overdraft....................................... $ -- $ 2,151
Accounts Payable..................................... -- 15,603
Payroll Taxes Payable................................ 45,261 32,325
Sales Tax Payable.................................... -- 31
Accrued Interest Payable............................. 312 1,313
Accrued Income Taxes................................. 35,376 --
Current Portion of Long Term Notes................... 70,518 64,404
-------- --------
TOTAL CURRENT LIABILITIES............................ 151,467 115,827
LONG TERM LIABILITIES................................ 5,619 10,477
-------- --------
TOTAL LIABILITIES 157,086 126,304
-------- --------
Stockholders Equity:
Common Stock, $ 0.001 par value, 30,000,000 shares
authorized, 9,287,622 shares issued and outstanding.. 7,619 5
Convertible Preferred Stock, $0.001 par value,
5,000,000 shares authorized,
3,000,000 shares issued and outstanding,
one share convertible for three shares common....... 3,000 --
Paid in Capital....................................... 99,881 110,495
Retained Earnings..................................... 101,926 35,473
-------- --------
TOTAL STOCKHOLDERS EQUITY............................. 212,426 145,973
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY............. $369,512 $272,277
======== ========
The accompanying notes are an integral part of these statements.
3
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RAIN FOREST-MOOSE, LTD
CONSOLIDATED STATEMENTS OF INCOME
For the Three and Six Months June 30, 1996 and 1995
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, 1996 June 30, 1995 June 30, 1996 June 30,1995
------------- ------------- -------------- ------------
<S> <C> <C> <C> <C>
Sales Income................................ $135,485 $96,678 $337,992 $189,152
Cost of Sales:
Materials................................... 18,371 11,107 47,066 32,334
Warehouse Labor............................. 9,841 14,830 22,322 19,102
Freight..................................... 222 430 1,183 530
---------- --------- ---------- ----------
Total Cost of Sales......................... 28,434 26,367 70,571 51,967
--------- -------- --------- ---------
GROSS PROFIT................................ 107,051 70,311 267,421 137,185
Operating Expenses.......................... 70,291 69,161 163,638 121,918
--------- -------- --------- ---------
INCOME FROM OPERATIONS...................... 36,760 1,150 103,783 15,267
Other Income and (Expenses).................
Interest Income............................. 180 -- 180 --
Interest Expense............................ (367) (754) (2,134) (1,378)
--------- -------- ---------- ----------
Total Other Income and (Expenses)........... (187) (754) (1,954) (1,378)
--------- -------- ---------- ----------
NET INCOME BEFORE
INCOME TAXES....................... 36,573 396 101,829 13,889
Income Taxes................................ (11,540) -- (35,376) --
-------- --------- --------- --------
NET INCOME.................................. $ 25,033 $ 396 $ 66,453 $ 13,889
========= ======== ========= =========
WEIGHTED AVERAGE number of
common stock and common stock
equivalents outstanding................. 18,287,622 16,618,702 18,287,622 16,618,702
========== ========== ========== ==========
NET INCOME per common stock and
common stock equivalents $.001 NIL $.004 NIL
===== === ===== ===
</TABLE>
The accompanying notes are an integral part of these statements.
4
<PAGE>
RAIN FOREST-MOOSE, LTD
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Six Months Ended June 30, 1996 and 1995
Six Months Ended
June 30, 1996 June 30, 1995
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income............................................ $66,453 $13,889
Adjustments to reconcile net loss to net cash provided
by operating activities:
Depreciation.......................................... 6,785 4,944
Amortization.......................................... 450 --
(Increase) decrease in:
Accounts Receivable................................... (14,773) (8,687)
Prepaid Expenses...................................... 658 --
Inventory............................................. (38,609) (58,890)
Increase (decrease) in:
Bank Overdraft........................................ (2,151) (300)
Accounts Payable...................................... (15,603) 3,502
Payroll Taxes Payable................................. 12,936 8,701
Sales Taxes Payable................................... (31) --
Accrued Interest Payable.............................. (1,001) (711)
Accrued Income Taxes.................................. 35,376 --
-------- -------
NET CASH PROVIDED (USED)
BY OPERATING ACTIVITIES............................... 50,490 (37,552)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of Equipment........................ (1,052) (20,349)
Note Receivable Stockholder.................. (30,775) --
-------- ---------
NET CASH USED BY INVESTING ACTIVITIES................. (31,827) (20,349)
CASH FLOWS FROM FINANCING ACTIVITIES:
New borrowings-
Long-Term.................................... 70,000 80,482
Debt Reduction-
Long-Term.................................... (68,744) (17,363)
-------- --------
NET CASH PROVIDED BY
FINANCING ACTIVITIES.................................. 1,256 63,119
-------- --------
NET INCREASE IN CASH.................................. $19,919 $5,218
CASH AT BEGINNING OF THE YEAR......................... 3,008 --
-------- --------
CASH AT END OF PERIOD................................. $22,927 $ 5,218
======== ========
SUPPLEMENTAL DISCLOSURES
Interest Paid......................................... $ 2,134 $ 1,378
======== ========
The accompanying notes are an integral part of these statements.
5
<PAGE>
RAIN FOREST-MOOSE, LTD
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Three and Six Months Ended June 30, 1996 and 1996
STATEMENT OF SIGNIFICANT ACCOUNTING ASSUMPTIONS
BASIS OF ACCOUNTING
The financial statements of Rain Forest Moose, Ltd. at June 30, 1996, have been
prepared on the accrual basis of accounting. Using this method, revenue and
expenses are recognized when occurred.
The financial statements included in this report have been prepared by the
Company pursuant to the rules and regulations of the Securities and Exchange
Commission for interim reporting and include all adjustments which are, in the
opinion of management, necessary for a fair presentation. These financial
statements have not been audited by an independent accountant.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to such rules and regulations for
interim reporting. The Company believes that the disclosures are adequate.
However, these financial statements should be read in conjunction with the
audited financial statements and notes thereto included in the annual report on
form 10-KSB filed by the Company with the Securities and Exchange Commission on
March 8, 1996. The financial data for the interim periods presented may not
necessarily reflect the results to be expected for the full year.
INVENTORY
Inventory is carried at the lower of cost or market and consists of raw
materials and ready to sell products.
PROPERTY AND EQUIPMENT
Property and Equipment are recorded at acquisition cost. Depreciation is
computed using accelerated methods by charging against earnings amounts
sufficient to amortize the cost of the related assets over their estimated
useful lives.
INCOME TAXES
For income tax reporting and financial statement reporting at June 30, 1996, the
Company is using depreciation methods that are the same and therefore there is
no accrual for deferred income taxes at this time. However, because of various
elections available at the time of filing the income tax returns, there may be
future differences between income tax depreciation expense and financial
statement depreciation expense giving rise to accrual of deferred income taxes.
No allowance has been made for income tax expense at June 30, 1995 because the
company was a recognized subchapter S corporation and as such the income from
the corporation was passed through to the stockholders and was taxed on their
personal returns.
NOTE-1: PROPERTY , PLANT AND EQUIPMENT
All assets are recorded at original cost. Depreciation is calculated using
accelerated methods, lives are five years for autos and office equipment, seven
years for manufacturing equipment and furniture, and 10 years for Leasehold
Improvements.
The autos are pledged as collateral to Springdale Bank and Trust of Springdale,
Arkansas.
6
<PAGE>
NOTE-2: THE COMPANY'S LONG-TERM DEBT CONSISTS OF THE FOLLOWING:
June 30, December 31,
1996 1995
------- --------
Anchor Financial, 21 % interest, $354.39 per month.......$ 3,468 $ 5,462
Maturity Date: 6-30-1997
Secured by computer printers and a copier
Springdale Bank & Trust, 10.25%, $534.58 per month....... 11,146 13,691
Maturity Date: 5-10-98
Secured by 90 GMC truck
Springdale Bank & Trust, 10.25%, Monthly Int. Only Payment. -- 30,000
Maturity Date 4-26-96
Secured by Inventory and A/R
Springdale Bank & Trust, 10%, Monthly Int. Only Payment...60,000 --
Maturity Date 6-21-97
Secured by Inventory and A/R
U. S. Equipment, Inc., 7.5%, Payable on Demand........... 1,523 8,409
Maturity Date Payable on Demand
Unsecured
Note Payable Dan Pilkington, 7.5%, Payable on Demand..... -- 17,319
Maturity Date Payable on Demand
Unsecured
Current Portion of long-term debt....................... (70,518) (64,404)
------- --------
Long-term debt, less current portion................... $ 5,619 $10,477
======= ========
The following is a summary of principal maturities of debt:
June 30, 1997........................................... $ 70,518
June 30, 1998........................................... 5,619
NOTE 3: RELATED PARTY TRANSACTIONS
U. S. Equipment, Inc. (Note 2) is 100 % owned by Monica Pilkington who is the
wife of Dan Pilkington the president of Rain Forest-Moose, Ltd. Rain Forest
Moose, Ltd. owed to U. S. Equipment, Inc. $1,523 and $8,409 on June 30, 1996 and
1995, respectively.
Dan Pilkington is the president of Rain Forest-Moose, Ltd. (Note 2). Rain Forest
Moose, Ltd. owed $ 17,319 to Dan Pilkington on June 30, 1995.
NOTE 4: EARNINGS PER COMMON SHARE
Earnings per common share were computed using the weighted average number of
common shares outstanding after adding the dilutive effect of the conversion of
the preferred stock.
7
<PAGE>
SUPPLEMENTAL INFORMATION
RAIN FOREST-MOOSE, LTD
NOTES TO FINANCIAL STATEMENTS
For the Three and Six Months Ended June 30, 1996 and 1995
Three Months Ended June 30, Six Months Ended June 30,
1996 1995 1996 1995
Operating Expenses:
Accounting..................$ 1,500 $ - $ 3,650 $ 208
Advertising................. 100 1,497 100 4,352
Amortization................ 225 0 450 0
Auto & Truck................ 5,746 3,000 8,778 10,667
Bank Charges................ 6 15 56 343
Credit Card Fees............ 104 0 138 0
Contributions............... 500 5,241 500 6,241
Depreciation................ 3,393 2,511 6,785 4,944
Dues & Subscriptions........ 220 158 220 471
Entertainment............... 0 1,400 0 1,450
Equipment Rental............ 0 1,665 0 2,202
Insurance................... 2,727 2,291 5,327 4,084
Management Expense.......... 758 92 851 227
Miscellaneous............... 0 905 18 1,080
Office Expense.............. 1,083 944 5,679 1,423
Office Salaries............. 8,502 8,921 17,047 16,084
Other Salaries.............. 7,800 0 15,303 0
Payroll Tax Expense......... 1,999 3,992 4,182 4,867
Postage..................... 0 50 1,664 100
Rent........................ 6,723 5,851 13,344 14,134
Repairs..................... 45 43 285 142
Sales Commission............ 2,000 15,110 18,371 24,706
Supplies.................... 817 1,402 1,465 2,227
Taxes & Licenses............ 45 1,487 130 2,381
Telephone................... 6,303 2,673 16,286 5,488
Travel...................... 17,857 6,541 40,412 9667
Unemployment Taxes.......... 1,154 2,611 1,154 2,611
Utilities................... 84 761 1,443 1,819
TOTAL OPERATING EXPENSES....$70,291 $69,161 $163,638 $121,918
======= ======= ======= ========
The accompanying notes are an integral part of this schedule.
8
<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operation
The following discussion should be read in conjunction with the
financial statements and notes thereto appearing elsewhere in this Report.
Rendezvous Trails of America, Inc. (formerly Holiday Resorts
International, Inc.) ("RTA"), the former parent of Rain Forest, was incorporated
in April 1970. Since 1986, RTA became inactive and did not conduct any
operations or activities through 1995 and, as of December 31, 1995, did not have
any assets. Pursuant to an Agreement and Plan of Merger, dated February 23,
1996, RTA merged with and into Rain Forest as the surviving corporation. The
merger of RTA with and into Rain Forest effectively changed the state of
domicile of RTA to Nevada as a result of Rain Forest being the surviving
corporation and was accounted for as a reorganization of entities under common
control which was recorded at historical cost. Rain Forest - Moose, Ltd., an
Arkansas corporation ("RFM Arkansas"), was formed on March 15, 1994. Pursuant to
a Plan of Reorganization and Agreement of Merger, dated March 5, 1996, RFM
Arkansas merged with a wholly-owned subsidiary of the Company, and as the
surviving corporation, RFM Arkansas became a wholly-owned subsidiary of the
Company which was accounted for as a reverse acquisition of the Company by RFM
Arkansas under the purchase method of accounting (the "RFM Arkansas
Acquisition"). Therefore, the following discussion and analysis of results of
operations discussed below are only those of RFM Arkansas prior to the RFM
Arkansas Acquisition.
Results of Operations
The following table sets forth selected results of operations for the
three months period and the six months ended June 30, 1995 and 1996 which are
derived from the unaudited financial statements of the Company.
<TABLE>
<CAPTION>
For the Three Months Ended June 30, For the Six Months Ended June 30,
1995 1996 1995 1996
Amount Percent Amount Percent Amount Percent Amount Percent
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Sales income................... $ 96,678 100.0 % $135,485 100.0% $189,152 100.0% $337,992 100.0%
-------- ----- -------- ----- -------- ----- -------- -----
Cost of sales:
Materials.................... 11,107 11.5 % 18,371 13.6% 32,334 71.1% 47,066 13.9%
Warehouse labor.............. 14,830 15.3 % 9,841 7.3% 19,102 10.1% 22,322 6.6%
Freight...................... 430 .4 222 .2% 530 .3% 1,183 .4%
------------------- ------------------ --------------- ------- ---------- -------
%
Total Cost of Sales........ 26,367 27.2 % 28,434 21.0% 51,967 27.5% 70,571 20.9%
--------- ------ ---------- ------ ----------- ------ --------- ------
Gross profit................... 70,311 72.8 % 107,051 79.0% 137,185 72.5% 267,421 79.1%
--------- ------ ---------- ------ ---------- ------ -------- ------
Operating expenses............. 69,161 71.5 % 70,291 51.9% 121,918 64.5% 163,638 48.4%
--------- ------ ----------- ------ ----------- ------ -------- ------
Income or (loss)
from operations.............. 1,150 (1.3)% 36,760 27.1% 15,267 8.1% 103,783 30.7%
--------- - ------ -------- ------ ----------- ------ -------- ------
Other income and (expense):
Interest income.............. A A % 180 .1% A A % 180 A %
Interest expense............. (754) .8% (367) .3% (1,378) .7% (2,134) .6%
----- ------- ------ ------
Total other income
and (expense)........... (754) .8% (187) .1% (1,378) .7% .6%
----- ------- --------- ------- ---------- ------- --- -------
(1,954)
Income before income taxes..... 396 (.5)% 36,573 27.0% 13,889 7.3% 101,829 30.1%
Income tax expense............. A A % (11,540) (8.5)% A A % (35,376) 10.5%
---------- ------- --------- ------ -------------- ------- --------- ------
Net Income or (loss)........... $ 396 .5 % $ 25,033 18.5% $ 13,889 7.3% $ 66,453 19.6%
================== ========= ====== ========== ====== ========= ======
</TABLE>
Comparison of the three month and six month periods ended June 30, 1996 and 1995
Sales income increased (i) $148,840 to $337,992 in the six months ended
June 30, 1996 (the "1996 Interim
9
<PAGE>
Period") from $189,152 for the six months ended June 30, 1995 (the "1995 Interim
Period") and (ii) $38,807 to $135,485 in the three months ended June 30, 1996
(the "1996 Second Quarter") from $96,678 for the three months ended June 30,
1995 (the "1995 Second Quarter"), an increase of 40 percent. The increase in
revenues was due to an increase in the cubic foot volume of sales of Peat Moose
Absorbent products during the period. The increase in sales volume was
attributable to an improved and growing distribution system and an increase in
the demand for the Company's products through additional marketing efforts with
more focus on industrial users within particular industries and businesses,
especially the oil and gas and transportation industries. Although the cubic
foot volume of sales increased significantly in the 1996 Interim Period and the
1996 Second Quarter, cost of sales increased $18,604 from $51,967 in the 1995
Interim Period to $70,571 in the 1996 Interim Period, but decreased as a percent
of sales income from 27.5 percent in the 1995 Interim Period to 20.9 in the 1996
Interim Period. Furthermore, cost of sales increased $2,067 from $26,367 in the
1995 Second Quarter to $28,434 in the 1996 Second Quarter, but decreased as a
percent of sales income from 27.2 percent in the 1995 Second Quarter to 21 in
the 1996 Second Quarter. The decrease as a percent of sales income was
attributable to a decrease in costs of materials as a percent of sales from 71.1
percent in the 1995 Interim Period to 13.9 percent in the 1996 Interim Period,
and a decrease in warehouse labor from 10.1 to 6.6 percent during the 1996
Interim Period compared to the 1995 Interim Period. The decrease in cost of
materials was attributable to higher volume of purchasing and the decrease in
warehouse labor costs was attributable to a reduction and reallocation of
personnel. Gross profit increased $130,236 from $137,185 in the 1995 Interim
Period to $267,421 in the 1996 Interim Period, and as a percent of sales income
increased from 72.5 percent in the 1995 Interim Period to 79.1 percent in the
1996 Interim Period. The decrease in cost of materials was attributable to
higher volume of purchasing and the decrease in warehouse labor costs was
attributable to a reduction and reallocation of personnel. Gross profit
increased $36,740 from $70,311 in the 1995 Second Quarter to $107,051 in the
1996 Second Quarter, and as a percent of sales income increased from 72.8
percent in the 1995 Second Quarter to 79 percent in the 1996 Second Quarter.
Operating expenses increased $41,720 from $121,918 in the 1995 Interim
Period to $163,638 in the 1996 Interim Period, an increase of 34.2 percent, but
decreased as a percent of sales income from 64.5 percent in the 1995 Interim
Period to 48.4 percent in the 1996 Interim Period. Operating expenses increased
$1,130 from $69,161 in the 1995 Second Quarter to $70,291 in the 1996 Second
Quarter, but decreased as a percent of sales income from 71.5 percent in the
1995 Second Quarter to 51.9 percent in the 1996 Second Quarter. The increase in
operating expenses was principally attributable to increases in office expense,
telephone and travel expenses associated with increased sales volume.
Income from operations increased to $103,783 in the 1996 Interim
Period, compared to $15,267 in the 1995 Interim Period, a 580 percent increase.
In addition, income from operations increased to $36,760 in the 1996 Second
Quarter, compared to $1,115 in the 1995 Second Quarter, a 3,097 percent
increase. Income from operations was 30.7 percent of sales income in the 1996
Interim Period compared to 8.1 percent in the 1995 Interim Period, which was
principally due to the increase in sales volume, while costs of sales and
operating expenses did not increase at the same rate of sales volume.
Net income before income taxes was $103,783 in the 1996 Interim Period
(which represented 30.7 percent of income from sales), compared to $15,267 in
the 1995 Interim Period (which represented 8.1 percent of income from sales),
while net income before income taxes was $36,760 in the 1996 Second Quarter
(which represented 27.1 percent of income from sales), compared to $1,150 in the
1995 Second Quarter (which represented 1.3 percent of income from sales). Net
income after income taxes was $66,453 in the 1996 Interim Period (which
represented 19.6 percent of income from sales), an increase of $52,564 (a 378
percent increase) from $13,889 in the 1995 Interim Period. ). Net income after
income taxes was $25,033 in the 1996 Second Quarter (which represented 18.5
percent of income from sales), an increase of $24,637 from $396 in the 1995
Second Quarter.
10
<PAGE>
Quarterly Results of Operations
The Company's operations are affected by seasonal trends principally
based upon weather conditions affecting the oil and gas and transportation
industries. In the Company's experience, sales volume tends to be higher in the
second, third and fourth calendar quarters and lower in the first quarter.
Because the general and administrative expenses associated with maintaining and
adding to the Company's manufacturing work force are relatively fixed over the
short term, the Company's margins tend to increase in periods of higher sales
volume and decrease in periods of lower sales volume. These effects are not
always apparent because of the impact and timing of factors which are beyond the
control of the Company. Nevertheless, the Company's results of operations for a
particular calendar quarter may not be indicative of the results to be expected
during other quarters.
Income Taxes
Prior to the RFM Arkansas Acquisition, RFM Arkansas, for federal and
state income tax purposes, was taxed as a pass-through entity, and income taxes
were not imposed at RFM Arkansas's level of taxation. Therefore, during the 1995
Interim Period no provision for income taxes was made, while during the 1996
Interim Period the provision for income taxes was $35,376.
Liquidity and Capital Resources
Historically, the Company financed its growth from borrowings and
shareholder contributions. Net cash provided by operating activities totaled
$50,490 in the 1996 Interim Period, while net cash used by operating activities
totaled $37,552 in the 1995 Interim Period. As of June 30, 1996, the Company had
working capital of $132,103, compared to working capital of $95,100, at December
31, 1995. In the event the Company's income from sales continue to increase as
anticipated by management, the Company's working capital requirements will also
increase and such requirements may exceed the net cash provided by operating
activities which may require that cash be used in operating activities from
sources other than operations, including the available cash and cash equivalents
(which were $22,927 at June 30, 1996) and borrowings. The increase in cash used
in operations will principally be due to the timing differential between the
Company's payment for materials and services to its suppliers and employee work
force, and the time at which the Company receives payment from its customers.
RFM Arkansas has two separate notes payable to Springdale Bank & Trust
Company (the "Bank"), which are secured by certain a vehicle and inventory and
accounts receivable and bear interest at 10.25 percent per annum. One note
requires monthly principal and interest installment payments of $535 through May
1998 and the other note requires monthly interest payments and matured on June
30, 1997, respectively. At June 30, 1996, the outstanding principal balance of
these loans were $11,146 and $60,000, respectively. In addition, RFM Arkansas
has an equipment loan with Anchor Financial Corp. which is secured by office
equipment, bears interest at 21 percent per annum, and requires monthly
principal and interest installment payments of $354 through June 1997. The
outstanding principal amount of this loan at June 30, 1996, was $3,468. RFM
Arkansas also has an unsecured loan with U.S. Equipment & Services, Inc. (which
is wholly-owned by Monica Pilkington, an executive officer and the wife of Dan
Pilkington, the President, a Director and major shareholder of the Company)
which bears interest at 7.5 percent per annum and is due on demand. The
outstanding principal amounts of this loan was $1,523 at June 30, 1996.
There can be no assurance that cash flows from operations of RFM
Arkansas will be sufficient to service its obligations under the various
financing arrangements. The Company's cash flows currently are totally dependent
upon the operations of RFM Arkansas, and such dependency may continue
indefinitely.
RFM Arkansas and the Company do not currently have any significant
capital commitments. The Company anticipates that existing cash and cash
equivalent balances and short-term investments, and funds to be generated from
future operations will be sufficient to fund operations, and budgeted capital
expenditures through 1996.
11
<PAGE>
Part II - OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 27--Financial Data Schedule
(b) Reports on Form 8-K
Item 5. Other Events
As a result of unavailability of, and failure to
maintain, accurate records and information relating to the
ownership of the outstanding common stock of Rendezvous Trails
of America, Inc., the former parent and predecessor of Rain
Forest - Moose, Ltd. ("Registrant"), during 1996 Registrant
inaccurately reported the number of shares of its outstanding
common stock in reports filed with the Commission. The number
of Registrant's shares of common stock issued and outstanding
as of March 7, 1996 (as reported on the cover of Registrant's
Annual Report on Form 10-KSB) was 8,887,622 and as of July 26,
1996, was 9,287,622.
12
<PAGE>
SIGNATURES
In accordance with the Exchange Act, the Registrant caused this amended
report to be signed on its behalf by the undersigned, thereunto duly authorized.
RAIN FOREST - MOOSE, LTD.
(Registrant)
By: /S/DAN PILKINGTON
---------------------
Dan Pilkington, President
Date: August 10,1996
13
<PAGE>
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0
3,000
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